LTIMindtree shares under pressure after IT majors Q1 results disappoint Street; what should investors do?

LTIMindtree shares were under pressure on Tuesday, a day after the IT major reported a set of quarterly results that fell short of analysts' expectations on all fronts. The LTIMindtree stock — traded on bourses with the symbol LTIM — dropped by as much as Rs 189.3 or 3.7 per cent to Rs 4,944.7 apiece on BSE. 

LTIMindtree Q1 results: A summary

After market hours on Monday, LTIMindtree reported a consolidated net profit of Rs 1,152 crore for the quarter ended June 2023, marking an increase of 3.4 per cent compared with the previous three months. Its revenue increased 0.1 per cent sequentially to Rs 8,702 crore or $1,058.7 million, according to a regulatory filing. 

The Mumbai-based IT company's margin improved by 30 basis points on a quarter-on-quarter basis to 16.7 per cent for the first quarter of the current financial year. 

According to Zee Business analysts, LTIMindtree's quarterly net profit was estimated at Rs 1,210 crore, revenue at Rs 8,775 crore or $1,069 million, and margin at 16.6 per cent.

Revenue growth in constant currency terms came in at 0.1 per cent sequentially, as against the estimate of 0.5 per cent, according to a company statement. 

Attrition at LTIMindtree came down to 17.8 per cent for the April-June period, from 20.2 per cent the previous quarter.

EDITOR'S TAKE | Strong support zone for LTIMindtree shares at Rs 4,800-4,950 levels 

Zee Business Managing Editor Anil Singhvi pointed out that the company's outlook is positive despite results being weak on all parameters. He expects buying to emerge in LTIMindtree shares from lower levels given the stock is already part of the Nifty. 

Last week, LTIMindtree replaced HDFC in the Nifty basket, as the stock of the mortgage lender got delisted from the bourses owing to its mega merger with HDFC Bank. Read more on LTIMindtree shares

What brokerages make of LTIMindtree after IT major's weak Q1 show

Brokerages held mixed views on LTIMIndtree after the company's earnings announcement, with Macquarie retaining an 'outperform' rating on the stock with a target price of Rs 7,300 — implying upside potential of more than 42 per cent from Monday's closing price.

On the other hand, JPMorgan maintained an 'underweight' call on LTIMindtree and reduced its target price by Rs 50 to Rs 3,800, suggesting a downside of 26 per cent. 

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